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L. JOSEPH THOMAS: May I have your attention, please? My name is Joe Thomas. I have the privilege of introducing our speaker for this session, my friend and colleague, Professor Bob Frank. Bob is the Henrietta Johnson Louis Professor of Management and Professor of Economics at the Johnson Graduate School of Management. Yes, it's the same Johnson that you noticed along the way. Wonder why that is.
AUDIENCE: Louder.
L. JOSEPH THOMAS: Louder. OK. How's that?
AUDIENCE: Good.
L. JOSEPH THOMAS: That's good. I was saying that Bob Frank is the Henrietta Johnson Louis Professor of Economics. Bob has published lots and lots of books. It's probably why many of you are here. The Winner-Take-All Economy won many, many awards. And he's going to talk about one that he's working on right now. I would give you all of his qualifications, but then he'd have no time to talk.
[LAUGHTER]
So I will tell you that his books have been published in 22 languages, that he has won many teaching awards, including he is one of two three-time winners in the Johnson Graduate School of Management of the Russell Teaching Award, which is given by the five-year reunion class. That it, people come back and say, the professor who we not only liked while we were there, but the one that gave us value that we still remember. So this, I think, is quite a testament to his teaching ability. His books and other publications are a testament to his research and ideas.
I was also asked by the dean of the faculty to say, why did we pick Bob, because we were asked. And a couple things. He is interesting, provocative, and talks about things that are important. Now we have a few other people in this school, we think, and all the schools and colleges at Cornell too that are interesting, provocative, and talk about things that are important. But Bob is special in my opinion.
I will tell you one reason why. We did an event in New York City with PJ O'Rourke. How many of you know PJ O'Rourke, that name? PJ O'Rourke is a conservative writer and humorist. And he is different from a lot of political discussion these days, as is Bob, in that he's very intelligent [INAUDIBLE].
[LAUGHTER]
And he and Bob had this wonderful discussion where they have different points of view, listened to the other, found common ground, and found that they agreed on more things than they disagreed upon. Bob does that. He is always interesting to talk to. He is going to talk today about his new book, Success and Luck. Please help me welcome Professor Robert Frank.
[APPLAUSE]
ROBERT H. FRANK: Thank you so much, Joe. I was really honored to have been chosen by the school to take this slot. There are, as Joe said, a lot of good people who could have done it, so that they chose me was really a very gratifying thing.
And Joe was asking me what I'd like him to mention out of the bio sheet that I sent him. I said, well, don't use too many things. And thankfully, he didn't. But I said, the thing I'm proudest of is the three Russell Teaching Awards. And Joe described them as ones where it shows that they liked you when you were in school, and then five years later, they still liked you. I don't think that's the way I interpreted the Russell awards. A lot of them didn't like me while they were in school. But I hope, on reflection, thought some of what I had to say was useful in the years after they left.
Anyway, I know you all could have gone to a lot of interesting stuff during this hour, or not even come to Ithaca this weekend, for that matter. A psychiatrist friend of mine once told me that going forward, given all the touch screen options we have and diversions that are just a flick away, the scarce resource going forward will be the willingness of other people to pay attention to you. So for me to have an auditorium full of people with not much choice but to listen for the next 50 minutes, what a great luxury. That's a huge perk of this job.
Joe mentioned my title, Success and Luck. It's a personal perspective. They tell authors, write what you know. I can say, at my age and given my personal and professional experience, I'll claim, subject to verification, that I know more about luck than anyone else in the room. If you don't agree, come up and tell me about it later. But I'll explain to you why I think that.
I've written a column for The New York Times for about a decade, and have an uneasy relationship with my editor there. He insists that every piece begin with a pithy summary of what the piece is about. I've never liked starting pieces that way. It's, I think, as a reader, way more fun to be drawn in by accident. And so I'm not on a leash today. I'm free to do as I wish.
So I'm going to start with a story about my longtime favorite fiction author. That would be Elmore Leonard. If you don't know Elmore Leonard, you're missing a real treat. The master craftsmen of dialogue writing in American English. He died in 2013, sad to say. And in the days after his death, I happened to be driving downtown, and Terry Gross on Fresh Air came on, replaying segments from two of her earlier interviews with him. And the thing she was focused on in one segment of the playback was the smart comebacks that his characters are renowned for. They come up with these lines that are just unbelievably clever on the spur of the moment.
And she asks, can you do that? Do you have the verbal dexterity of your characters? And he demurs, no, no. I can't do that. It's different in writing. He says, you write a scene, you've got six months to think about it. And, yeah. You can come up with the perfect line to end the scene. But in real life, it's just very different.
She's not satisfied. She keeps pressing. Well, do you think over conversations that you've had with friends, and try to come up with the thing you wish you'd said? And he doesn't seem to want to go there, but she keeps pressing. And then he comes back with this, without any hesitation. "Well, in real life, I'm sitting on a bench in Aspen at 4 o'clock in the afternoon, dead tired. I've come down the mountain, and a woman skis down 25, 30 years younger than I am, puts one boot up on the bench and says, 'I don't know what's more satisfying. Taking off my boots or--'" and then she used an expression for sleeping with somebody.
[LAUGHTER]
Gross gasped audibly. "And you said?" Leonard. "And I said, 'huh? Er-- eh--' and that was probably 15 years ago," adding that he'd been trying ever since that day, without success, to come up with even a decent comeback line.
[LAUGHTER]
Never mind a snappy one. Now it's good to be able to think on your feet. Did they practice that exchange? It didn't sound like it. If not, then I suspect Leonard's actually pretty good at thinking on his feet. I can't imagine a more pitch-perfect response to her line of inquiry than that. But I don't have that capacity, and sometimes it's a source of embarrassment to me. Other times, it's more costly than that.
I'll describe one episode. I had written one of the first columns I published in The Times on the subject that gradually evolved into this book. And a few days later, I got a call at my office from Fox Business News. Stuart Varney wanted to have me on to talk about my column. And ever the optimist, I agreed. I thought I could describe some research that his viewers would find edifying, and that he might even think interesting. Wrong. From start to finish, it was a pitched battle. Let me play you a brief clip from my conversation with Stuart Varney.
[VIDEO PLAYBACK]
-Success to economic success. Hard work? Talent? Determination? No, not so, says Cornell University Professor Robert Frank. He's actually smiling. He's sitting next to me. Here's what he says. "Contrary to what many parents tell their children, talent and hard work are neither necessary nor sufficient for economic success" He says success has a lot to do with luck. And he's joining us right now in the studio. Professor. wait a minute. Do you know how insulting that was when I read that? I came to America with nothing 35 years ago and made something of myself. I think through hard work, talent, and risk taking. And you're going to write in The New York Times that this is luck?
-No, I didn't say that in The New York Times. What I said, actually, is that if you have lots of talent and you work very hard, you're still probably not going to be a big success. There's also a big element of luck. But--
-I'm taking the other side of the coin, which is you said that you need luck, and luck is part of being wealthy and successful. You are downturning, downplaying hard work, talent, brains, drive, and ability. You are, in fact, taking on the American dream. You are saying that the American dream is not really the American dream. It's not really there.
-No, I don't believe I'm saying that, Stuart. No, I reviewed some footage before coming down. I would say, respectfully consider the possibility that you're very lucky. You do a lot of hard work, I'm sure. You started with that much. But you're very lucky to have ended up successful. There are a lot of people who work hard and are just as talented--
-Wait a minute. Am I lucky or not?
-Yes.
-[INAUDIBLE] who I am, where I am. I'm lucky?
-You are.
-Lucky. OK.
-And so am I.
-That's outrageous. That is outrageous.
[LAUGHTER]
What about the risk I took? Do you know what risk is involved in coming to America with absolutely nothing? Do you know what risk is involved in trying to work for a major American network with a British accent, a total foreigner? Do you know what risk is implied for this level of success?
-I do.
[LAUGHTER]
-Is it luck [INAUDIBLE]?
-Yes.
-That's nonsense.
-It wasn't just luck. I got the seventh job at Cornell the year I was hired.
[END PLAYBACK]
It went on and on--
[LAUGHTER]
--for six more excruciating minutes. It was a--
[LAUGHTER]
--it was a very difficult experience for me personally to just sit there and be grilled like that. And what was the most frustrating thing was to realize in the taxicab leaving the studio, all the fat pitches he'd thrown up to me that I just failed to swing at, you know? There were so many opportunities when I could have set him straight on this or that.
So he says, he took risks. That's what he said, three or four different times. If you take a risk, that means, according to Merriam Webster's dictionary, something bad might happen. You might succeed, you might fail. If you took risks, a bunch of risks and succeeded, then he was lucky by definition. Why didn't I think to say that when we were sitting there in the studio? Three or four friends wrote me emails that evening. Why didn't you think to say that?
[LAUGHTER]
Yeah, I know. Why didn't I think to say that?
[LAUGHTER]
You know who this is. He described how hard it was to come to the US with a British accent.
[LAUGHTER]
Frank Rhodes' early colleague at University of Michigan, who's a friend of mine, said, you should have heard Frank Rhodes when he first came here from England. His British accent wasn't nearly as strong as it is today.
[LAUGHTER]
Why is that? That's because the alumni love British accents. They get their checkbooks out and start writing checks when they hear the mellifluous Oxbridge accent coming at them. Success, in spite of a British accent. Please. That's completely--
[LAUGHTER]
I had looked up his bio on the web the night before. He has a degree from the London School of Economics. That's a pretty good credential to enter the labor market in the US with, then and now. So the man is utterly uncognizant of the fact that he has a few things going for him that were not of his own doing.
So, all right. I was embarrassed. I probably was in a funk for a day or two after that interview. Why didn't I do This Why didn't I do that? But now it's kind of a fun story to tell. But sometimes, if you don't think quickly and do the right thing, it can be quite hazardous to your health.
I'll describe an episode that occurred to me years ago on Cayuga Lake. I was windsurfing. It was a very strange day. The winds were highly variable, anywhere from 40-plus miles an hour to dead calm. In heavy winds, most windsurfers use a harness. A harness is just a life vest with a hook in the front that hooks over a rope that's tied to the boom. That way, you can lean back and your body weight does most of the work that otherwise you'd have to do actively with your hands and arms, and it relieves fatigue. So I looked for a picture of one. That's not me.
[LAUGHTER]
But that's a harness. You see the hook over the rope. Well, a big gust blew through. A huge gust, after a momentary calm. And it blew me over the boom and sail. The next thing I knew, I was dazed, coming to under the sail, with water above me between me and the sail, no air anywhere in sight. And so I thought to myself, thinking quickly, I better get out from under the sail. That much, I kept straight. And so I started tugging on s rope, trying to get it off the hook. But I had done a couple of twists in the air, and so the rope was very tightly wound around the hook. And the hook on my device has a little nipple at the end just so the rope won't fall off. So I was not able to get past that.
So all right. I'm not able to get the rope off. What do I do now? Quick thinking, I pushed up on the sail, hoping to get some air to come up under it. But that didn't work. So what next? I don't have a plan C. So I go back to plan A, which is pull more on the rope. I pull on the rope, nothing. Back to plan B. Push up on the sail. Nothing. One more round of each, pulling on the rope, pushing on the sail. That last time pushing on the sail, I'm really about at the end of my time. I hear this glorious sucking sound.
[SUCKING]
Air rushes up under the sail, and I bob to the surface, and just gasp for a minute or two. And then I think, well, all right, what next? Well, what next was what should have been what came first. I said, I can't get the rope off, but I don't have to get the rope off. I just have to take off my life vest. I unzipped it.
[LAUGHTER]
I took it off, and I swam out from under the sail. But if the sail hadn't let some air in under it at just that last moment, I wouldn't be telling you this story. So if you can't think on your feet, that can be costly to you. It would be good to be able to do it, but not everyone can do it.
Probably the biggest lucky break that's ever befallen me occurred about seven and a half years ago. I was playing tennis with my longtime friend and collaborator, the Cornell psychologist Tom Gilovich. If you're coming to the behavioral economics panel tomorrow, you will see him there.
Tom tells me that as we sat during a changeover during the second set, I complained of feeling nauseated. And he said, the next thing he knew, there I was on the tennis court. And he knelt to examine me, discovered that I had-- I wasn't breathing, I had no pulse.
He yelled out for somebody to call 911. He flipped me over onto my back. He had never had any training in CPR, but he had, like you and me, seen it done on TV and in the movies many times. And so he started banging on my chest rhythmically. And he remembers being told by an Israeli student that in his military training, he'd been told, if the person you're trying to revive dies and you didn't break his breastbone, you didn't try hard enough.
So he said, he worked hard on getting-- and he said he finally, after what seemed like forever, got a cough out of me, and then he lost me again. And he thought, well, that's it. And just at that moment, the ambulance attendants burst in with the shock machine and the paddles, and they cut my shirt off me, and shocked me back to life, and carted me out to the ambulance where they took me to Cayuga Medical Center where they quick looked me over, and the put me on a helicopter, and flew me down to [INAUDIBLE].
And there I sat in a hospital bed, or lay in a hospital bed for three or four days. The first three of them, I was talking complete gibberish, my family tells me. They would tell me something, I would say something back, and then I'd repeat it moments later, completely unaware that I'd said it. No one knew how long had been deprived of oxygen, and one of the risks of sudden cardiac death, which is what my doctor said I had suffered, is that, well, the biggest risk is 98% of the events like that that occur in the field end there. You don't ever come back to life.
Of the ones who are revived, the 2%, he said, most of them survive with severe disabilities of one kind or another, cognitive or other disabilities. And so the family was obviously gravely worried. What sort of state would I emerge from all this in if I emerge at all? They had put me on ice overnight in the hospital in Pennsylvania.
So it was a total relief that on the Tuesday-- this happened on a Saturday-- the Tuesday in the hospital, I woke up with a clear head. I could converse back and forth and keep things in memory. And wow. How did I survive that? The thing that enabled me to survive, according to the doctor, was the fact that the ambulance attendants had gotten there so quickly and managed to revive me and get some oxygen into me.
And he asked, how did the ambulance get there quickly enough to do that? The ambulances are dispatched from five miles from the Eastlake tennis facility. They've got to go all the way across town. It would have taken normally 30, 40 minutes for an ambulance to get there. Well it turned out that there were two car accidents right in the vicinity of the Eastlake tennis facility just before I collapsed on the tennis court. One of them had injuries that weren't serious, and that freed up the driver of that ambulance to peel off and come to me.
So I'm alive, standing here in front of you, by virtue of pure dumb luck. That's how I see it. Many of my friends say, no, I'm part of a divine plan.
[LAUGHTER]
I kind of like the sound of that, but that's never been a comfortable view for me. No, my mother always worried about me because that wasn't a comfortable view for me. But I think of that as just a chance event that I happened to be there and be a beneficiary of. I mean, it wasn't just chance. Tom thought quickly and acted with skill. But luck's the main part of the story that sticks with me.
There's good luck, and there's bad luck. Here is Mike Edwards being dispatched from the accident that killed him. He was one of the founding members of the British pop band Electric Light Orchestra. He was driving along on a rural British roadway. There was a 1,300 pound bale of hay tethered to the hillside a half a mile uphill. Mysteriously, it broke loose from its moorings, came tumbling down the hill. There was a berm in front of the tall wire fence that shielded the field from the road. It hit that berm at such speed, it catapulted over the fence and landed right on the cab of his van as he drove by. He was a nice person, by all accounts. He didn't do anything wrong that day. He didn't deserve to die. He was just unlucky.
Now most people can see events like the one I went through, like the one that Michael Edwards went through, and they have no trouble saying, yeah, that's-- boy. Chance really does figure pretty prominently in events like that. But then they resist bitterly, as Stuart Varney did, any attempt to say minor chance events have a more systematically important role in everyone's life. And what I'll try to do in the time I have is describe to you some findings of recent social science and other research that suggests that these kinds of events are vastly more important than most of us realize.
Suppose chance events didn't affect labor market outcomes at all. I'm going to just take that as an assumption. Talent and effort are all that matter, just like Stuart Varney thinks, Well, then you could say, where do talent and effort come from? We don't know, is the answer. They come from some combination of your genes and your environment. Were you raised by caring, attentive parents? Did they pass along genetic material that coded for high intelligence and energy when you get out of the bed in the morning? If so, you're incredibly lucky. Those are the things that the market values. You're going to do really well, because you had that inheritance bequeathed to you. If you didn't get that from your parents, you're unlucky.
On what moral theory do you want to claim credit for being a talented, smart person? Good for you. You're lucky if you're talented and smart. But that's not my focus. We don't have any control over any of those things. I'm wanting to think more about random events that happen to us once we're out there with whatever talent and inclination that we have to start our careers.
I started my career here at Cornell at age 27. It was an unbelievable confluence of events that made it possible for me to start my career here. I was looking around for a picture of myself back from those days. All I could find was a passport photo taken a few years after I got here.
[LAUGHTER]
You could say I was lucky not to have been arrested as a terrorist on my way here.
[LAUGHTER]
I got on the plane in San Francisco-- I was a graduate student at Berkeley-- to go to New Orleans to interview for jobs the last year of my PhD program. That's the custom in economics. I talked to a bunch of schools, but as I was boarding the plane, it was clear that the flu that had been stalking me for several days had finally taken a real grip on me. I got to New Orleans with 104-degree fever. I struggled through my interviews as best I could. But I did a terrible, terrible job. I'm absolutely certain I must have offended everybody I talked to. And I left the city in a funk, thinking nobody would ever want to interview me any further.
And so I think they must have had some other information to go on to counteract the impression I made in the interviews, because I did get a few callbacks. I got one from a school in the Midwest that I won't name. It was a small, non-research school that would not have been an ideal destination for a research-oriented graduate student from Berkeley. I got an invitation from Cornell, a great prospect. And one also from the University of Wisconsin.
So I took my trip to the Midwest. I gave my talk. I went home. I got home a day-- they called me and offered me a job. Well, at least I didn't strike out. I was pleased. Cornell called and invited me out. I went to Cornell. I gave a talk at Cornell. They, a couple of days later, called me and said, we'd like you to join the department. Whoa. Are you kidding? A department like Cornell? I couldn't believe it. And so I said, well, I've got one more trip planned to Wisconsin next week. How about if I tell you after I've taken that trip? And they said, no.
[LAUGHTER]
You've got four days to make up your mind. I said, well, then I'll come.
[LAUGHTER]
Because I knew I wasn't going to be willing to risk turning down a Cornell offer on the chance that I'd get an offer from Wisconsin. Wisconsin was maybe a slightly better department, but not much better. And Ithaca's kind of a charming place. I've been here and liked it. I didn't know if I'd like Madison. People say it's nice too.
I got here the next year, and a second-year assistant professor said that I'd gotten the seventh out of seven offers that had been given that year. There had never been seven offers given before, or since, I don't think. Maybe it's been closed. There was an unusually big year last year. He went on to say that he was the one who had seconded the motion that I get the seventh offer, and that had so angered the chairman that the chairman threw a piece of chalk at him from across the room.
[LAUGHTER]
The chairman favored a different candidate, and he was a volatile man, given to such outbursts. And I'm pleased to say, I've kind of kept track of the other candidate, and I've done better than he has.
[LAUGHTER]
I was not only lucky to get hired at Cornell. I was even luckier to get to stay at Cornell. I got here, I went through a painful marriage breakup in year two. That's the only kind of marriage breakup that I know about. And I was the sole caregiver for four and two-year-old boys, which meant going home at 3 o'clock in the afternoon from the office each day. And I'd essentially got nothing written. I had a paper published with a classmate in graduate school, but nothing written. My thesis, I wouldn't want anybody to see it. It wasn't very good. The pipeline was essentially empty.
These days, they would fire somebody like that. They wouldn't even have a meeting. They would just say, I'm letting you know before the meeting that you might want to resign so it doesn't say fired on your card. But in those days, the standards were a little more lax. I was doing a good job in the introductory class, which met in this same room. And I wasn't very expensive. It wasn't easy to staff that course. So, let's keep it on for a couple more years, and then we'll fire him--
[LAUGHTER]
-after your six. So I got to stay. The next year, Ned Gramlich came as a visitor to the department. He was a very distinguished policy economist who came as a visitor from the Brookings Institution. Nobody had taken an interest in me up until that point. He took an immediate interest in me. We talked often, we would go skiing on Saturdays that winter, and talked about economics on the chairlifts up. It was a tonic for me to interact with somebody who seemed to care. He thought my ideas were interesting.
He came to me one day and said, would you do a paper for a volume that I'm putting together? And the first thing an academic wants to say is, no, because nobody reads papers and edited volumes. Danny Kahneman, the Nobel laureate psychologist in economics says, never write a paper for a volume. That's his advice to younger colleagues. But I didn't have anything, so I said, yeah. I'll do it.
So I worked hard on the paper. I was pleased with the resulting effort. I gave it to Ned. Ned said, I'll have a look and be back to you. And he came back and knocked on my door two days later with a crestfallen expression on his face, to say that the editor of the volume, the series that the volume was to appear in, had just call him to say that the series had been canceled.
[LAUGHTER]
Bad luck, I thought. But then on a lark, I sent the paper out to Econometrica, which, for the economists in the room, I don't need to tell you that was then and still is one of the most prestigious professional journals in our field. It came back six weeks later with an unconditional acceptance. None of the usual revise and resubmit. A couple of punctuation changes, but nothing that required a second look. Wow. What a nice break that was. I did an immediate extension of that paper, a spin-off of it. I sent it off. It got accepted.
I was invited by a colleague to spend the next summer in Berlin. I went. I remember sitting on the bed in my apartment right off the Ku'damm, writing furiously on yellow tablets. I wrote three papers that summer. When I got back, the secretaries typed them up. I sent them out for a review. Bang, bang, bang. AR, JP, RE stat accepted by the best journalists in economics with no substantive demands for revisions, and only a six day week's delay even to turn them around to tell me what had happened. And then I wrote a few more papers after that that got accepted too. Never again has that ever happened to me.
[LAUGHTER]
I've written scores of papers in the years since. I think those early papers were good, but the papers I've written since, I think, were better. And I've never had one accept it on the first try. Usually, it's rejected once, sometimes as many as four times. When it's accepted, usually it's with demands for substantive revisions, and that takes another-- you don't hear back for a year, many times. Then you revise and resubmit, and then it's another six or eight months before you hear again. And so if those first papers I submitted had met the standard fate, the fate that every economist knows full well to expect, I never would have managed to get promoted here.
One of my colleagues later told me that the department seemed eager to terminate my contract. They appointed a committee known for its harsh views of external reviewers. They wrote to them. But actually, I had a good record by them. And they probably would have had to fire all of us in order to fire me. And if anybody would have complained, they would have had an argument that they wouldn't want to deal with. And so reluctantly, they approved my tenure. And except for that, I'd be laboring in the trenches in a teaching institution in the Midwest somewhere.
One of my classmates went to that school. As it turns out, he would call me from time to time. He would say he was lonely. He would say, no one's doing anything interesting here. There's an occasional senior who writes an honors paper, and that's fun to talk to them, but his colleagues weren't doing anything interesting. Not much was demanded of faculty there. You didn't have to-- there weren't high expectations of what you would publish.
I'm lazy by nature. I'm a procrastinator. If that was the expectation I met when I went there, I could've delivered on that with no problem at all.
[LAUGHTER]
And as Dan Gilbert says, you go, wherever you go, you adjust. You're happy. And so what difference does it make? Well, I've argued long and hard with him about that. I think it makes a huge difference. If I hadn't come to Cornell, I never would have gotten invited to all the stimulating conferences I've been invited to, I wouldn't have had all the stimulating students and colleagues to interact with over the years, I never would have been invited to write a column for The New York Times, I'm sure. I never would have gotten invited to go to Dharamsala and spend 10 days with the Dalai Lama. None of that would have happened if I'd not been-- if it hadn't been for that string of events whose probability has to be just too small even to write on a blackboard.
And that's not an unusual trajectory. And maybe it's quantitatively a little bit more extreme than the typical trajectory, but the things that succeed big often are not any different from the things that don't succeed big.
Here's the Mona Lisa. It's the most famous painting in the world. That's Kim Kardashian, one of the most famous young women in the world. When we hear about famous things, the tendency is to try to explain why they're famous. We look for the characteristics that made them better than all the other things in the same category.
But Duncan Watts, the sociologist, suggests maybe that's missing the main picture of what's going on here. These two items here plausibly are famous for one reason. Because they're famous. They're famous for being famous. The Mona Lisa was an unknown painting for most of its early history. It was in The Louvre, but nobody had written about it or made much remark of it. Out One evening, an Italian custodian snuck it out of The Louvre under his cloak and he held it in secret for two years.
There was a huge media storm about the stolen painting. Two years later, he surfaced at the Uffizi in Florence, trying to repatriate the Mona Lisa to Italy. And he was apprehended and put jail at that point. But it was such a media sensation that for the first time in the world, photographs of a painting were reproduced in newspapers all over the world. It became a high symbol of Western culture.
Duncan Watts goes to the Louvre where he sees the throngs of people standing around the Mona Lisa. There are two Leonardo's in the adjacent gallery from the same period, the same new style of brush strokes that he was using at that time. Nobody gives a damn about those paintings. Nobody's watching them. Why is it the Mona Lisa? it's just because the Mona Lisa got famous because of a purely chance event. It's an easier sell to persuade you that Kim Kardashian is famous for being famous. Not too many people are really trying to explain what she did to deserve her fame.
[LAUGHTER]
The music lab experiment by Duncan Watts tries to pin this down more closely. A control group on a website saw 48 band names, indie bands, that you've never heard of. My sons are indie band members. I know a lot about indie bands. I've never heard of any of them. 48 song names. You could download anyone you want, as long as you agreed to give it a rating without any other information. Just listen to it and give it a rating. That was the objective quality rating for the song.
Then they did eight separate websites with different people visiting. They saw the same information, but in addition, they saw how many times it had already been downloaded and what the average rating it had received so far. And the interesting thing was that the trajectory of the song was highly variable in those eight separate websites. Some songs were so good, they did pretty well in each of the eights. Some where so bad that they did really bad in the eights. But the vast majority of the songs had been middling objective quality ratings. And if the first person who downloaded them and listened to them rated them near the top of the scale, then they went off on a successful trajectory.
He cites 52 Metro's "Lockdown." I have a clip here I could play for you. In the interest of time, I won't. But also in the interests of your sanity, I won't.
[LAUGHTER]
It's an execrable song in my opinion, but somebody else thought it was good. And in one of the eight cohorts, it ranked number one of the 48 songs. In another, it ranked number 40 out of the 48 songs. I would love to have heard the eight songs that ranked below it.
[LAUGHTER]
I strongly commend Duncan Watts' book Everything is Obvious. There are chance events like this everywhere you investigate. So John Cusack turned down the Walter White role when Vince Gilligan was preparing to launch his breakout hit series, Breaking Bad. I want to call it the most spectacular successful TV drama of all time. My editor wants me to call it one of the most spectacularly successful-- OK, we'll resolve that before the book comes out.
But in any case, it's a big deal, this series. Walter White, the ailing chemistry professor turned to meth kingpin was cast as the role for Bryan Cranston only after John Cusack turned it down. When Cusack turned it down, they went to Matthew Broderick. He turned it down too. Then finally, Gilligan was able to prevail with the money guys and get the role steered to Cranston.
Cranston won five Emmys. The series wouldn't have been such a success probably without him. But who was he before that? He was the dad on Malcolm in the Middle, kind of a journeyman. Never had a leading dramatic role ever. Gilligan saw him as a talent that he wanted to cast in the role. And luckily for Gilligan, for Bryan Cranston, and for the studio, the chance events fell into place, and he got the role. Cranston is now one of the most highly sought-after actors in the entire profession.
I'm going to skip the-- I'll give you a reason to buy the book.
[LAUGHTER]
In the book, my research assistant, Selena [INAUDIBLE], I see sitting in the fourth row there, third row, helped me with a simulation in which we let the labor market trajectories play out in a contest. It's like a foot race. Performance is all that counts. It's purely meritocratic skill. Effort matters, luck matters, but it's mostly skill and effort. And in the instantiation I'll mention, we let 49% of your performance be determined by skill or talent, 49% by luck-- only 2% by effort, and only 2% by luck. So luck's a tiny slice of the picture.
There are a lot of contestants in this contest. More than wanted to succeed, Derek Jeter, perhaps. My two youngest sons wanted to succeed him when he retired at shortstop. They eventually learned that wasn't going to happen. But these contests that bestow the biggest rewards in society attract huge numbers of contestants.
And what we found was that the winner of these contests in the simulations was rarely the most talented and effortful person. It was always somebody was near the top on effort and talent, but rarely the most talented. And the most talented person might be lucky, might not be lucky. On average, is neither lucky nor unlucky. And there are almost always a bunch who are almost as talented as the most talented, and some of them will have been lucky.
And so that explains why, among the winners of contests, the most frequently represented draw from the luck distribution was anywhere from 95 to 100, 100 being the maximum. And so most of the time, the average percentage of the winners who didn't rank first in the ability plus effort scores, well more than half upwards of 90%, in many cases.
So luck's "not something you can mention in the presence of self-made men," according to our Cornell alum EB White. It's a natural thing. You're successful. What does that mean? That means you probably worked hard. Doesn't necessarily mean that, as I told Stuart Varney. Think about lip-syncing boy bands. There are people who didn't work hard, but they succeeded. But most of the time, the success stories, those people worked really hard, and they're very skillful.
When you're writing your life story for yourself, when you're thinking, what's my narrative, you construct it from memory. So here you are, you've succeeded, you've been succeeding by solving difficult problems, working long hours for 30 years. Why did I succeed? Well, the obvious explanation that you retrieve from memory is that I'm good, and I worked hard. I did it on my own.
But that's not enough. It's not enough just to do it on your own. There are so many people who did it on their own too, and didn't succeed. That's the part that's left unexamined by people like Stuart Varney.
If you say you did it on your own, people may think ill of you. Adam Smith wrote this. "The man who esteems himself as he ought, and no more than he ought, seldom fails to obtain from other people all the esteem that he himself thinks due. He desires no more than his due to him, and he rests upon it with complete satisfaction." But if you say, I did it all myself, it was because I was so good, people are going to think you're overreaching a little bit.
Well, so what if they think that? It's not in your interest for people to think ill of you. In life, the biggest success stories occur as members of effective teams. The day of the lone wolf is rapidly receding in the economy. If you want to be on a really high quality team, the members of that team, if they cam work successfully together and smoothly, they've got lots of options. Everybody wants to be on their team. And so if you're not an attractive team member, who needs you? We don't need you. Come back. Go look for a job in some other team.
Here's Scott Forstall. He was the senior vice president at Apple until October of 2012, when he was fired by Tim Cook, the new CEO, for being a clash with the company's collaborative culture. You want ambitious team members. Ambition is a good quality. But it's a good quality up to a point. Most cultures recognize that ambition, past a certain point, begins to become a negative. Why? Because it means that when no one's looking, you'll put your interests ahead of the team's interest when it suits you to do that. And people would complain that Forstall would claim credit for things he didn't do, and would steer blame to others for things that he did do. And so we don't want a guy like that. He's a brilliant engineer. He was often described as the next CEO of Apple.
Contrast him with my textbook co-author, Ben Bernanke. We started writing an introductory textbook in the late '90s. I would tell people at conferences that I'm writing a textbook with Ben Bernanke. These would be people I would meet who I knew were faculty members of Princeton. He was, at the time, the chairman of the econ department at Princeton. Anyone in the room who's been a chairman can tell you that department members rarely say such things about their chairmen. Chairmen usually take the jobs reluctantly. They don't want to be chairman. They don't try to do too much. And in a case like that, people don't say much about their chairman.
Occasionally, a chairman will be active and try to remake the department in some mold or other. Ben was that kind of chairman. In those cases, people hate the chairman. Personnel decisions are incredibly contentious. Some people will like a given appointment, but they'll be a very vocal minority opposed to every appointment.
That wasn't the case at Princeton. Ben would have been the smartest guy in the room, in most rooms, even when the room was full of smart academics. But it wasn't at all important for him to be thought of as the smartest guy in the room. He was delighted to share credit for good ideas with other people. He knew that a good idea was way more likely to be adopted, the more widely credit could be shared for it.
In economics, it's the practice to list authors alphabetically. Our textbook would have sold more copies if we had done that. Our textbook went out to the market as Frank and Bernanke. That was because he insisted that my name go first since, I had written the micro half, the part I was responsible for, and outlined the rationale for this new approach to a text, and he said he didn't feel right about his name going first. That's a good team member. And if you're a little bit cognizant that you didn't do it all yourself, you're not going to do worse in the world. You're probably going to do better, and you'll probably be a lot happier in the process.
I don't think I have time to describe the next stage of the project that's Selena and I are just trying to finish up now. It's an experiment where we tried to see how people would react to people who said, I did it all myself in one case, and I was lucky to have done so well in the other case. The main reason I've written this book is that I think we confront the mother of all lucky breaks. The luckiest break of all is to be born in an environment where you can be a success. And we were all born in such an environment. We could take talent and effort, and translate that through the institutions of the marketplace and the contract system that's been developed through huge investments by people who came before us, to make something of ourselves here.
This is my cook when I was a Peace Corps volunteer in Nepal. He was a Bhutanese hill tribesman. He was the smartest guy probably I've ever met, before or since, at least as far as I could tell. I never could give him an IQ test, because he couldn't read or write. He never learned to read or write. But there was nothing he couldn't do of a practical sort. He could negotiate with merchants tough, but he wouldn't offend them in the process. He could resole my shoes. He could fix an alarm clock. He could slaughter a goat. There was nothing he couldn't do. Re-thatch a roof.
But my meager stipend [INAUDIBLE] was the lifetime peak of his earnings trajectory, I'm almost certain. Napoleon said "ability is nothing without opportunity." And we all were lucky to be born in an environment that has opportunity. But that environment is under severe decay. We are not making the investments needed to provide opportunity for kids who would be willing to work hard and who have some talent, to actually translate those qualities into economic success.
The reason I say we confront the mother of all lucky breaks is that it would be really easy through a simple change in tax policy to pay for all the investments that we haven't been making, and recreate the environment that we've all enjoyed growing up. It would be really easy to do that, and no one would have to give up anything important.
If I had time, I'd take a few minutes and describe that to you. But what I'm going to do instead is tell you that in the behavioral economics panel tomorrow, I will go through the argument on behalf of that claim. If you think I'm a wind bag in making that claim, ideally, you won't want to come. But I promise you that the argument in support of that claim has very few moving parts, and that none of them is the least bit controversial. A very simple change in the tax policy could redirect trillions of dollars toward things that would actually make a difference in people's lives without requiring anybody to give up anything important.
The one hint I'll throw out is that weddings-- we just got some new figures last month-- weddings in the United States now cost an average of $31,000. In New York, in Manhattan, the Borough of Manhattan, $76,000. In 1980, the average figure was closer to $10,000. No one thinks that the couples getting married today are happier because they're spending three times as much on their wedding. Or maybe I should ask. Is anyone willing to admit he thinks or she thinks that they are?
[LAUGHTER]
Well, if you think that, then I'll show you a study that shows that the more people spend on their weddings, the sooner they divorce, in the recent climate. So let me skip over the next slides, because I'll show them to you tomorrow.
[LAUGHTER]
And I'll say that I have decided-- first of all, as I told you, I recognize that I'm very lucky to be alive and able to do anything looking forward. But I've decided in the time I have left to try to devote all of my effort to persuading people that there's a better way than the way we've chosen. That low taxes on the highest earners that enable them to spend millions of dollars on coming-of-age celebrations for their kids is not the best way to make good use of our national resources, not only from the perspective of poor and middle class citizens, but from their perspective as well. There's a better package on offer available to them. So that's the conversation I want to participate in.
I think people say, oh, there's no way change can happen. I reject that claim. Change does happen. It happens surprisingly fast, in some cases. A decade ago, every state in the country had a very solid majority against same-sex marriage. Three years ago, it was splitting about 50-50. Now almost every part of the country has a clear majority in favor of letting people marry whomever they choose. How did that happen so fast? It was one person talking to another. Hey, why shouldn't they-- there doesn't seem to be a threat they're posing. Why shouldn't they be allowed to marry whom they please?
Nobody saw Arab Spring coming. That was another conversational dynamic. That was a prairie fire that nobody saw coming. So things can change quickly if you talk about them. It's clear that bad ideas sometimes drive out good ones in the short run. But I'm an optimist. I think good ideas are more likely to prevail if we make the clearest possible arguments in their favor. So that's what I want to focus my attention on. And thank goodness I was lucky enough to survive with enough capacity to be able to do that.
This slide here I'm showing you, those were the three items in a box that I opened under a Christmas tree in our living room in December of 2007. I had been out of the hospital for three or four weeks. The box had a card announcing that it was the great triumvirate. It was a Tilley hat, a cross pen, and a little clay tennis shoe that my wife had molded out of clay.
And so the history of that gift was that when the neurologist examined me in Pennsylvania before I was-- in day two or three of my stay there, the main concern, if you survive sudden cardiac death, is that since the brain's been without oxygen for a long time, there may be severe cognitive impairments of one kind or another. My memory came back, but they were asking me to come back down to Pennsylvania to be tested to see whether there might be more subtle cognitive impairments.
And so while I was in the hospital the first time, they gave me what's apparently a standard test. The neurologist told me-- I don't remember this. Ellen described this story to me. He told me, I'm going to give you three words, and I want you to hold them in memory, and I'll come back and ask you about them later. And then he said, hat, shoe, pen. And then he came back five minutes later and said, what were the three words? And I said, what three words?
[LAUGHTER]
I had no recollection that he'd asked me to remember three words. So here it is, January 2008, and I'm scheduled to go down-- Ellen's going to drive with me-- for my follow-up checkup. And I'm a little worried. What are they going to find? Am my damaged goods? And so I said to Ellen, give me three words. Let me practice a little bit. And she looked out. We were sitting at the table, looking out at backyard. She said, stick, tree, squirrel. And then we talked for a little while longer, and she said, all right. Now I'm going to test you. And I said, well, first of all, can you remember them?
[LAUGHTER]
And she thought about it, and she said, no.
[LAUGHTER]
But I could remember them, so I was feeling confident. And the next day, we drive down to [INAUDIBLE], and the neurologist tells me, says, all right. This is midway into the conversation. I'm going to give you three words to remember, and then I'll come back and ask you about them later. And he looks at me, and he says, hat, shoe, pen.
[LAUGHTER]
And I look at Ellen, and Ellen looks at me. It was all we could do to keep from cracking up. The same three words, he'd given me when I was there in November. Of course, he would give me the same three words. How else is he going to remember what the three words were?
[LAUGHTER]
So he comes back. He says, all right. What are the three words? And I draw a blank. I have a moment of panic. And then I see the box under the tree. And I say, hat, shoe, pen. And I'm out of there with a clean bill of health, and the rest is history. I'm working on my books. I've got another book I'm going to start as soon as this one's turned in. I'm lucky, and so are you. And if you don't realize that, you haven't thought about it long and hard enough. So I'm happy to take questions, and mainly, thanks for taking time out of what could have been a lot of other interesting things that you had on offer. I think I would have gone to see Richard Price if it had been me.
[LAUGHTER]
[APPLAUSE]
L. JOSEPH THOMAS: You can leave if you have someplace to go, but we have some time for questions. Who had a question? Please.
ROBERT H. FRANK: You want to call it? Yeah.
AUDIENCE: Hey, Bob. Thank you for that great talk. I'm a big proponent of your belief in luck. And I can look back on my own life and see all the amazing things that led to where I am now, just through luck. But how do you motivate kids when they turn around and say, well, it's all luck. I can work as hard as I want, and it's just luck if I succeed or not.
ROBERT H. FRANK: So the question is, yes, I too realize that I've been lucky, but isn't it dangerous to tell kids that luck's so important, because maybe they'll say, why bother? If you need to be lucky, I probably won't be lucky. And then at least I can spare all the effort of working hard. That's a terrific question, and it's one that I wrestle with in the book.
The question is, why do many people insist that luck doesn't matter? I think you've walked right into what's probably the main reason. One of the basic human shortcomings that behavioral economists have focused on is the inability to pass up the quick, inferior reward in favor of waiting for the more distant one that's bigger. It's really hard to do investment now that won't pay off for months or years, because the effort comes now. You're not even sure there's going to be a payoff, and if there is a payoff, it's later, so you have to imagine it. The effort you can feel right now. So saying, it's all up to you, that's a pretty good message to give your kids. Don't sit back and hope you get lucky, because just getting lucky isn't going to be enough for you.
I said in my column that Stuart Varney picked on, skill and effort are neither necessary nor sufficient. That's because we can think of some examples where people without skill or effort have managed to succeed anyway. But there aren't very many examples like that. So I think if you want your kids to develop expertise, which is a hard thing to do, you better stress early and often that there are real reasons to do that. And if they get lucky and get rich, so much the better. But you can lead a pretty interesting life if you're an expert at something, even if you don't get lucky. But that's a great question. I love that.
AUDIENCE: What do you think of the expression, the harder I work, the luckier I am?
ROBERT H. FRANK: What do I think of the expression, the harder I work, the luckier I get? I agree 100% with it. So if I've worked hard and developed some expertise, and then an opportunity comes along, I can seize it, if that's what the opportunity requires of me. If I haven't worked hard and that same opportunity comes along, it's of no value to me. So, yeah. If you're not prepared to seize opportunities, you're not going to be able to exploit the luck that comes your way. Absolutely.
AUDIENCE: Thanks for a great lecture. I wanted to thank you for providing a very easy to understand discussion about economics, especially since I don't have the background. Can you define luck and also its relationship to destiny, and kind of the Eastern way of thinking, just sitting and believing things will come your way, and how you can go about choosing the lucky path, or becoming luckier, if there is such a way?
ROBERT H. FRANK: Can I-- you had the mic, so I think that was probably audible to the group. My answer is no, I can't do anything.
[LAUGHTER]
I would say, I wouldn't want to urge my kids to relax and sit back, and things will come your way. I think that's not a-- maybe if the world were different, that might be a strategy that would yield acceptable results, but it's a very competitive world that we live in. And I think there's good reason to believe-- and I'll talk about this tomorrow, that if everybody worked a little less frantically, we'd all be happier.
But that doesn't mean that if I took it easy, I'd be happier. There's a difference between what I can do, and what we can do. Think about the familiar metaphor, everybody stands up to see better, nobody sees better than if everybody had remained comfortably seated. You weren't stupid to stand up to see better. If you didn't stand up, you wouldn't see at all. So we as a community often do things that are suboptimal. If we would scale back together, we could all do better. But I would be reluctant to assume that an individual has the same opportunity to do that.
There are things individuals can do, and I think mindfulness, all-- I'm a great believer in the idea that if you want to go from A to B, maybe trying to go directly from A to B isn't the way to get there. You might want to take a curved path. Scott Forstall is a good example. He wanted to get to the top. But maybe if you want too much to get to the top, you don't get to the top. People don't want you on their team if you want too much to get to the top. So, yeah. There's a lot in that, but I don't have any special expertise, I don't believe, about that.
AUDIENCE: You mentioned that-- sorry. That's really loud. You mentioned that one of the dangers of luck might be raising a generation of those who are lazy and not willing to work hard. But couldn't you think that it could be a little more insidious than that? That the danger of recognizing luck for folks like those in this room begins that we then have to recognize that there are the those of us who are not lucky, and therefore, have not had the same advantages of us, and that means we have to start taking a look at much harder questions about the systems and the world that we live in?
ROBERT H. FRANK: You see danger in that. So the question is, if we recognize luck's powerful role, won't we then feel obligated to lavish more care on those who were not lucky? I think there's good evidence that people do feel more care for people who are not lucky when they are prompted to think about the role of luck in their own life.
But you see danger in that, and I think that's a good thing. Here's the key insight when it comes to doing something about this. I'm way richer than I ever imagined I'd be. I'm not a hedge fund-style rich person, but I didn't ever imagine a college professor would have as much money as I have. Anybody who's in the top quintile of the income distribution has lots and lots of money. And when we think about paying a little more in tax so that we could help educate a poor kid who comes from a place where the schools are bad, well, if I paid more tax, I'd have less money, and then I'd be less able to get what I want.
That's a totally natural way for people to think, because most of the time, when you have less money, it is harder to get what you want. But most the time when you have less money, it's times like I'd lost my job, I had a house fire, I got divorced. Something happened to me that caused me to have less money. And when I have less money and everyone else has the same, then it's harder for me to get what I want.
But when everyone has less money, as is what happens when taxes go up and we all have less income to spend, that's completely different. The stuff we want-- we want a home side with a view, we want a choice slip at the marina, we want that painting. There aren't enough of those things. You have to bid against other people like you to get them. And if you're paying a little more in tax, and I'm paying a little more in tax, those bidding contests are settled in exactly the same way as before.
So I don't see danger in thinking about people who've had bad luck and lack of opportunity. I think we could do so much more for people who are in that situation in life without having to give up anything that's important to us. It's an opportunity. And there's a good psychological evidence that when you do stuff like that, it makes you feel happier. It feels like you did something more important than when you bought something for yourself.
AUDIENCE: Thank you for--
ROBERT H. FRANK: I'm sorry. I forgot. Joe's calling--
AUDIENCE: Professor Frank, have you ever been in a situation where you feel that you are so lucky that you're not ready for it, which is what I feel at every second in my first years at Cornell? And how do you feel with this situation?
[LAUGHTER]
ROBERT H. FRANK: Do I ever feel that I'm so lucky that I'm not ready for it? No, that feeling doesn't sound like one I wrestle with too much. I mean, I--
[LAUGHTER]
I hope it's clear that I'm keenly aware that I'm lucky. You know, I was adopted as an infant. I grew up-- my adoptive parents were South Florida chiropractors. I had a X-ray machine in my living room growing up. There wasn't much money. If I wanted something, I had to work for it.
I met my birth mother's family when I was in my '30s. It turns out they're from a long-established New England family descended from Frederic Tudor, the Ice King, a man who spent many years in debtors' prisons and in bankruptcy before finally proving that if you chopped blocks of ice out of New England ponds, you could sell them in Calcutta and get filthy rich. I had seven or eight cousins who knew they were getting big money when they became adults. And they're lovely people. They welcomed me warmly. But none of them has managed to carve out a very interesting career. And I don't think I would've either if I'd known I had a lot of money coming at me as an adult.
So, yeah. I'm aware, when I think about it, that, yeah. I've been incredibly lucky. And sometimes for reasons that don't, at first glance, seem lucky. But I'm not overcome with the feeling I can't function because I'm too preoccupied with how lucky I am. You'll get over that next year.
[LAUGHTER]
L. JOSEPH THOMAS: We're going to take one more question and end the formal session. And if you have questions beyond that, you can come up. And Bob is going to chat for a few minutes after.
AUDIENCE: Hi. Thank you very much for a great lecture. My question is about the relationship between being at the right place at the right time as two components of being lucky. And one example I can think of is I was in a combat unit, and I almost got shot by a bullet. And after returning back to the base, I was telling myself, oh, I was so lucky. But then I thought about it, and I just told myself, I was in the right place at the right time instead of being a view feet to the right. So the relationship between the right place and the right time is two factors that define luck. So maybe if you can elaborate this point.
ROBERT H. FRANK: That strikes me as a garden variety example of good luck for you. The bullet was aimed at you or at somebody. The author of the bullet would have been happier if it had hit you. And it didn't hit you. And the fact that it didn't hit you was lucky for you. I don't have anything more elaborate to conclude than that. Time and place matter. Sure, they matter. If the opportunity comes along when you're not ready for it, then I mean, in a way, you're not lucky. If it comes in a place where you're not, you're not lucky.
Let me read you all a poem, and then-- is that OK, Joe? Can I take that couple of minutes? I was at an event in Mexico. There's a billionaire in Mexico, Ricardo Salinas, who funds the Mexican version of Ted Talks. And he invited a group of the speakers to his estate after the event. And we were going around the dinner table. He asked us to describe our next project. And I briefly described the success and luck book that I was working on. And the sound of my description prompted Richard Dawkins, the biologist who was also at the dinner table, to recite a poem. And I want to read it to you. But that would mean being able to find it, wouldn't it?
[LAUGHTER]
Ah. I'm on the trail of it. It's a poem written in 1920 by Aldous Huxley. And the title of it is "Fifth Philosopher's Song." "A million, million spermatozoa, all of them alive; out of their cataclysm, but one poor Noah dare hope to survive. And among that billion minus one might have chanced to be Shakespeare, another Newton, a new Donne-- but the one was me. Shame to have ousted your betters thus, taking ark while the others remained outside! Better for all of us, froward homunculus, if you'd quietly died!"
So chance goes way, way back. The odds of any of us being here in the form that makes us, us are some remotely minuscule that-- yeah. It's just all a dream, really. But you can't take that perspective and function. You've got to imagine that it's important that we're here, that there are things to be done, that there are people who need help, that you need to tend to your needs and to those of the people who depend on you. So don't get carried away by thoughts of chance and get paralyzed by it. Again, thank you very much.
[APPLAUSE]
In recent years, social scientists have discovered that chance events play a much larger role in important life outcomes than most people once imagined.
Robert Frank, the H.J Louis Professor of Management and professor of economics, explores the interesting and sometimes unexpected implications of those findings for how best to think about the role of luck in life. Part of Cornell's sesquicentennial celebration, April 24-27.
